Best Forex Broker for Beginners 【Top 3 Ranking + 5 Tips】
Which forex broker is best for me? There are thousands of brokers out there all screaming at me to sign up with them. Are they any different to one another? I want the most simple and reliable one.
So,,, It’s time to choose the right forex broker for you.
In this post, you will find the top 3 forex broker chosen out of 1000+, and 5 key factors to look at before opening an account.
If you are only looking for a quick answer, my top pick is XM, the best “go-to” forex broker not only for beginners but for advanced traders as well. I’m also currently with XM and reasons explained below.
Who writes this post: Hi! My name is Luffy! I’ve been trading forex for six years. I make my living from software development, and trading has been one of my primary sources of side income. Being able to trade at a decent level enabled me to travel more freely. Have a Good Trade!
- Best Forex Brokers for Beginners 【Top 3 Ranking: Chosen Out of 1000+】
- How to Find Your Best Forex Broker 【5 Tips for Beginners】
Best Forex Brokers for Beginners 【Top 3 Ranking: Chosen Out of 1000+】
You can find a ranking of top 3 forex brokers below, that I have compared from over 1000+ brokers.
Each broker below satisfies the essential requirements discussed at later section, take a grasp at each company’s website and see how you feel about them.
【XM】Winner of Global Forex Awards 2019
XM satisfies important requirements that are essential to start trading.
Unless you have a particular reason to avoid XM, sticking with them is the safe bet.
【FXTM】Whopping 1:1000 Leverage
FXTM comes second in the ranking.
They are one of the fast-growing forex brokers, also reputable as an investment broker.
If you are looking to invest your fund rather than trading on your own, it would worth looking into them.
【HYCM】Providing Trading Services Since 1977*
HYCM operates over 40 years, makes them one of the long served brokers in the world.
Unfortunately they are not keen on bonuses, and slightly conservative in leverage but it shouldn’t bother you if you are not risking more than $2000 / trade.
How to Find Your Best Forex Broker 【5 Tips for Beginners】
As I have mentioned at the beginning of the post, Forex broker that I recommend for a beginner is XM because they have high standards in all requriements
XM is licenced by ASIC in Australia, FCA in United Kingdon, and CySEC in Cyprus, having over 2.5 million clients in 196 countries around the world.
【XM】Winner of Global Forex Awards 2019
(the most recommended option is MT4, XM Ultra Low Standard)
Below are 5 factors which I hope help you find your best forex broker. Also, I’ve included what you don’t need to be concerned too much, especially if you are new to the market.
Signup bonus is a great way to get started because you can trade with real money without making any deposit.
It's always a good idea to "give it a shot" especially if you can do so with no risk. No Shit!😜
— Luffy@NoShitForexTrading (@luffynoshit) December 14, 2019
Although you can’t transfer the bonus directly to your bank account, you can certainly withdraw the profit made by the welcome bonus.
XM gives you $30 (or equivalent depends on your local currency) which can potentially provide a value of $15,000, yes that’s right, $15,000 with the maximum leverage
(in some countries you are allowed to have a maximum of 888 leverage, which means $30 will have a value of $26,640 or equivalent)
Tip: Take the bonus, use it for your advantage!
Leverage is the bread and butter in forex trading, especially if you are starting with small funds. (Most beginners start with less than $1000)
Without using leverage, traders who have small capital (trading capital less than a million) will have a tough time making “considerable” income from trading.
Here is an example trading with $100
|Every 1% movement||$1||$500|
(*It is considered a “big” move if market moves 1% intraday)
Tip: High leverage allows you to magnify the trading capital!
It will be your advantage if you can trade with your local currency because it’s simply easier to understand the value of it.
Trading can get complicated as it is, so you should make things simplified the best you can. (converting value of foreign currency to your local currency does use a bit of brainpower…)
XM is way ahead of competitors in terms of local currency acceptance.
Tip: Choose Broker that Offers Trading in Your Local Currency
Metatrader (MT4) Platform
If you are looking to trade professionally or even as a source of side income just like me, definitely recommended using MetaTrader 4 (MT4)
It is the widely accepted piece of software in the forex industry.
Here is how it works.
Each broker integrates with Metatrader and makes it available for traders to download from their website.
There are two versions of Metatrader, Metatrader 4 (MT4) and Metatrader 5 (MT5).
MT5 is made after MT4, as you can imagine from the number sequence, MT4 is more common, and the majority of retail traders and institutions use MT4.
Tip: Option to be able to use MT4 is a must
Negative Balance Protection
Last but not least, you MUST, choose the broker that provides Negative Balance Protection.
No questions asked this is a must.
Negative balance protection means you will only lose money that you deposit to the broker.
You think its too obvious right? Wrong!
This is an example:
- Trader entered into a trade. Determined to risk $100
- Market crashed (matter of seconds or milliseconds)
- The Rate went far beyond the traders Limit (price where trader would have lost $100). in normal case his/her postion is wiped – it’s called stop loss
- Stop loss didn’t get trigered because the movement was so fast
- The best price available when bank is back for accepting orders from brokers(You), your loss is calculated to $10,000
- If your broker doesn’t provide negative balance protection, you are legally liable for the whole $10,000 (regardless of how much fund you have with the broker)
If the broker offers negative balance protection, it means they will cover this loss (since its not your fault and you had no control over it)
Tip: It's a MUST to have negative balance protection, especially trading with leverage
Extra Tip: What is NOT essential to consider
List of factors that are not critical but some beginners tend to care too much.
Spread generally refers to the price difference between the buyer and seller + commission to the broker, and sometimes broker separates the spread with the commission. Spread fluctuates every moment, so it doesn’t make practical sense to compare the average or spot rate. I see some website compares just the spread ignoring about the commission, so don’t get tricked. Even if forex broker offers you great spread, the commission might be unreasonably high.
Numbers of Assets Available to Trade
It’s wonderful to be able to trade 3,000 assets instead of 50 right? Yes, I get that. But in reality, you are only going to trade the “major” ones. If you are beginner, do not worry about how many assets you can trade. All brokers do cover the major ones. It doesn’t help you with anything for having extra assets when you are not touching it.
Options of Trading Platform
You can only trade with 1 platform. As long as MT4 is covered, that’s all it matters. Stay away from “custom” platforms. They tend to be extremely Buggy.
Again, having many options for deposit and withdrawal doesn’t add any value to your trading. If you have your funding method available, do not need to be worried about how much more or fewer methods the broker offers.
So,,, how did you like this post? I hope you found your best broker or at least got an idea of what to look for. My advice for all the beginner trader is,,, Pick any broker that you like and move on. You can always change the broker if you feel its necessary; it’s more productive to study how to trade rather than comparing the small details of each broker. Good enough is good enough, right? No Shit!😜 Happy Trading!